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eniwetok

(1,629 posts)
Mon Mar 28, 2016, 11:44 AM Mar 2016

Ultra Low Interest Rates A Threat To Social Security [View all]


In perhaps 2-3 years new contributions to the Social Security trust fund will end and withdrawals from it will begin. The longevity of SS trust fund depends in large part on how its growth from interest exceeds its net outflow to existing SS recipients... the bigger the interest return, the longer the fund will last. But there is no floor on the interest rates the fund gets and the average interest rate for the entire fund in 2000 was 6.9%. Today it's 3.4% https://www.ssa.gov/oact/progdata/annualinterestrates.html

The average for the entire fund is being brought down by the ultra low interest rates set by the FED which brings down the rate US Treasuries get... and in this case the special treasuries the government issues to the SS fund. The formula was created by Congress in 1960 https://www.ssa.gov/oact/progdata/intrateformula.html and certainly Congress can change it.

Here are the rates any new money has been getting when it enters the fund: https://www.ssa.gov/oact/progdata/newIssueRates.html

In 2012 the average annual average interest for new monies was only 1.458% when according to http://www.usinflationcalculator.com/inflation/historical-inflation-rates/ the inflation rate was 2.1%!

SS was losing ground.

In 2013 the new monies were getting 1.9% and the inflation rate was 1.5%... a pathetic .4%.

WHY AREN'T THE DEFENDERS OF SOCIAL SECURITY RAISING THE ALARM BELLS?


Workers are involuntary taxed to provide mainly for their retirements and yet that goal is being undermined by politicians OF BOTH PARTIES. The SS trust fund has been a cash cow for politicians for too long. It MUST be treated with respect. There must be a floor beneath which the interest can not fall. I believe that should be at least 4%.
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A start TrueDemVA Mar 2016 #1
they will pay it back eniwetok Mar 2016 #4
So double taxation for the same benefits. OnlinePoker Mar 2016 #6
some canadian money is invested OUTSIDE the country eniwetok Mar 2016 #11
regressive vs progressive eniwetok Mar 2016 #54
It's not just taxation to pay back the interest OnlinePoker Mar 2016 #57
That's still a dumb idea Recursion Mar 2016 #38
LBJ and the "unified budget" NT 1939 Mar 2016 #48
It isn't raising alarm bells because the trust fund is supposed to be spent. jeff47 Mar 2016 #2
no guarantee the GOP will implode eniwetok Mar 2016 #12
There's no guarantee the sun will rise tomorrow Major Nikon Mar 2016 #14
it's untenable if the only new revenue is from eniwetok Mar 2016 #23
I'm speaking about the GOP, and not SS Major Nikon Mar 2016 #25
There's only so long the Democratic party can keep the Republican party alive. jeff47 Mar 2016 #17
where did you get 30 years from? eniwetok Mar 2016 #24
The 2034 claim started in about 2004. jeff47 Mar 2016 #30
I don't know where you got those numbers eniwetok Mar 2016 #40
From previous reports. Just because they're not online does not mean they do not exist. jeff47 Mar 2016 #41
*Applause* Recursion Mar 2016 #39
Is that you Pete Peterson? Fuddnik Mar 2016 #3
hardly eniwetok Mar 2016 #8
There it is! -none Mar 2016 #35
The rate that the government lends to itself is inherently trivial Taitertots Mar 2016 #5
2.8 trillion is trivial? eniwetok Mar 2016 #9
You're missing the point FBaggins Mar 2016 #15
of course... eniwetok Mar 2016 #37
"Lent and spent". It's gone. Every penny comes from increased taxes Taitertots Mar 2016 #50
shifting the tax burden... eniwetok Mar 2016 #52
The obligations are independent of the income stream. Taitertots Mar 2016 #53
see post above eniwetok Mar 2016 #55
of course interest payments come from the same source... somewhat. eniwetok Mar 2016 #56
Sorry... untrue FBaggins Mar 2016 #7
what's "untrue"? eniwetok Mar 2016 #10
The entire premise of the article. FBaggins Mar 2016 #13
sorry... you're incorrect eniwetok Mar 2016 #19
Apologies... but you still don't get it. FBaggins Mar 2016 #34
missing the math? eniwetok Mar 2016 #42
interest rates are set by Congress eniwetok Mar 2016 #22
Well, yeah Congress can always amend the SS Act. But until they do that, it's pretty much a market Hoyt Mar 2016 #28
comparable interest paid eniwetok Mar 2016 #43
Nope. They're tied to market rates FBaggins Mar 2016 #33
so you want to cut benefits? eniwetok Mar 2016 #21
Lol... nope FBaggins Mar 2016 #32
when you eniwetok Mar 2016 #44
Ultra low interest rates are not healthy for the economy in general... Wounded Bear Mar 2016 #16
nope... I don't favor privatization eniwetok Mar 2016 #20
In general, I agree.... Wounded Bear Mar 2016 #27
I think they have driven rates down in the hopes of spurring job creating business. Hoyt Mar 2016 #29
Low interest rates also reduce unemployment and generally boost the economy. jeff47 Mar 2016 #31
low interest rates eniwetok Mar 2016 #45
And it hasn't worked well because of other issues that only Congress, not the Fed, can address. strategery blunder Mar 2016 #47
And NO privatization Omaha Steve Mar 2016 #18
Raise the cap. nt WhiteTara Mar 2016 #26
or stop exempting capital gains eniwetok Mar 2016 #36
and, not or... Wounded Bear Mar 2016 #46
Ultra low interest rates... sendero Mar 2016 #49
Agreed. Allowing giant banks to borrow money for free from the taxpayers without no requirement GoneFishin Mar 2016 #51
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